The Emergence of Advertising as an Institution

The increasingly popular tool of advertising led to some spectacular sales success by its regular users. The first to utilize dominant space in national publications on regular schedules was a quartet of household products. Their messages to potential customers showed considerable psychological insight into the buying motives of customers.

It was, than, during this period of last two decades of the 19th century that advertising began to assume the characteristics of a full-blown institution. No longer used on sporadic basis to deal with particular market peculiarities, advertising increasingly came to be seen as an ongoing answer to a continuing problem-the profitable conduct of business.

Strongly influenced by the success of the first consistent users of national advertising, as well as by the unquestioned retail success stories, more and more companies overcame their reluctance to be associated with patent medicines, and sent their selling message to the marketplace through magazines, newspapers and religious wheels.

The Emergence of the “Full-Service” Agency

By the early years of the 1900s it had become obvious that advertising agents could no longer survive solely on their media buying skills. Their “inside information” advantage had been diminished with the publication of Rowell’s directory, and their special relationship to the media had been further undercut by the appeal of Ayer’s open contract. In addition, as one writer put it, “the woods were full” of advertising agents> thus in addition to their media work, agencies began to routinely prepare the advertisements themselves, and occasionally provide some market analysis.

The Foundation Era in Retrospect

From roughly 1840 to 1915 advertising evolved from an isolated phenomenon to encompass virtually all of the essential forms, functions, and forces of the contemporary institution. By way of review, during this period:
1. National (producer) advertising emerged.
2. The advertising agency evolved from a space wholesaler to a full-service partner
of  business, repeat with creative and research functions.
3. The commission system as a form of agency compensation was solidified.
4. The media came to rely upon advertising as a major subsidy.
5. Major criticism and organized self-regulation appeared.
6. Advertising organizations developed.

Serious discussions of advertising theory and tactics became apparent.